Heineken cuts 2023 forecast on Vietnam slowdown

By Reuters   July 31, 2023 | 04:17 am PT
Heineken cuts 2023 forecast on Vietnam slowdown
Glasses of Heineken beer are seen at a restaurant in Hanoi, Vietnam May 30, 2019. Picture taken May 30, 2019. Photo by Reuters/Kham
Heineken, the world's second-largest brewer by volume, on Monday cut its 2023 profit growth forecast after an economic slowdown in Vietnam depressed first-half earnings by more than expected.

The Dutch company, whose brands include Tiger and Sol, said it now expected growth in operating profit before one-offs this year to be between zero and a mid single-digit percentage. It had previously forecast a mid- to high- single-digit percentage.

In the first half, Heineken sold 5.6% less beer than a year ago, and despite a jump in revenue due to higher prices, suffered a 8.8% like-for-like decline in operating profit, compared with the average 4.8% decrease forecast in a company-compiled poll.

Heineken said its results in Asia had been affected by an economic slowdown, notably in Vietnam, one of the company's largest markets, which is facing reduced global demand for its exports.

Beer volumes in the region fell by 13.2% and sales of more expensive premium beers by even more. Operating profit reduced by about a third.

The brewer - whose namesake brand is Europe's top-selling beer - said it expected a strong overall turnaround of profit in the second half of the year.

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